In a day of reduced student demand, a number of colleges have turned to their athletic programs to help fill a portion of excess capacity. The idea is that an additional student paying anything is better than no student at all.

At the outset, let me say that this strategy can be helpful within the context of an overall enrollment enhancement plan (EEP). If ten or twelve percent of a student body is involved in intercollegiate athletics, it seems reasonable to move that number up two or three percentage points in the quest to fill empty classroom seats. Athletics can be an important part of the college experience and many have gained leadership and lifelong fitness benefits from their participation. My thesis is that moderation is important.

Consider the following two issues as a plan is put in place.

Marginal Revenue Analysis

First is a needed conversation about marginal revenue as it is practiced by many smaller, private institutions. The idea here is that the new students provide added revenues and therefore benefit the institution that has excess capacity.

Let’s start with the non-Division III (D3) colleges that attract athletes through scholarships. I recommend identifying the net tuition revenue (NTR) from scholarship recipients (excluding walk-ons) for each sport. We’ll assume table tennis has an average institutional scholarship (discount) of 75% off tuition and fees of $28,000. Each player thus contributes $7,000 on average. The math: ($28,000 X .25) = $7,000 NTR per person. Ten players generate ten times that amount or $70,000. The identification of NTR generated by individual sports is step 1.

For D3 schools, the entire roster can be used in terms of net tuition generated. Some carve out the impact players and only use their revenues but that can be somewhat subjective.

For step 2, the budgeted costs of the sport are identified, including coach salaries. That amount is then subtracted from the NTR sub-total. In this case, the spending and salary budget for table tennis is $46,000, including salaries, benefits, travel, lodging, meals, uniforms, equipment, game day costs, etc. Subtracting that amount from the $70,000 of NTR leaves a step 2 subtotal of $24,000.

Step 3 allocates athletic administration costs to each sport. I typically use headcount for this exercise, ensuring that smaller programs are not abnormally hit. Presuming $120,000 of athletic administration costs and 120 scholarship athletes, another $10,000 of cost is assessed against table tennis for its ten players (10 X $1,000.)

In the end, the ten players from table tennis generate $14,000 in NTR or $1,400 per person toward the cost of academic programs.

The final step aggregates all sports by net contribution to arrive at a total amount for the 120 scholarship athletes. For some analyses, this has resulted in a negligible, even a negative number. The question to be answered is whether enough is generated from these students to justify putting athletes in the classroom?

2. Atmosphere

Second is a conversation about the qualitative aspects of athletic recruitment. Put simply, too many institutions have accomplished increased athletic recruitment numbers in the face of an overall enrollment decline. Why is this so often the case?

There are likely a number of answers to this question and I recommend drilling down to find what is affecting your institution. Examples include scholarships being shifted toward athletes, leaving materially less for other students when an overall discount rate is targeted. Aggressive roster requirements can also detract the attention of the admission team to assisting coaches in their recruitment work. Other possibilities for non-athletic declines include deficient facilities or not offering the up and coming programs. Institutional bad news or severe competition in the regional area could be factors in drying up the non-athlete pool as well.

I suggest that another factor is worth investigating. When students visit, do they perceive yours to be a “jock school?” Walking through the student union or into the dining room, are there a lot of students dressed for athletic practices? Are athletes sticking together as they eat or walk around on campus? If you offer a chapel program, are athletes together during that experience? Do they sit together in classes? Do they exceed 20% of your student body? The reality is that many great students who would be wonderful additions to your campus are not athletically inclined. Oh, they may be reasonably good intramural players and enjoy being spectators for certain sports but their high school experience was primarily with non-athletes and they want something akin to that for college.

3. So what do we do?

Let’s replace our sports offerings with well-positioned chess boards and pipe-smoking, blazer clad sophomores debating each other on the sidewalks. OK, maybe not. Let me suggest adding a few questions to the survey you give to all of your student visitors (you do survey them, don’t you?) Ask them to rank what they thought your reputation was before arriving and their impression after visiting. There could be five or more general descriptions of your atmosphere, including “athletic school, academically serious, socially active (party school)” etc.

In essence, find out how you are being perceived so that recruitment and messaging strategies can be adjusted accordingly. Do this before embarking on a wholesale addition of sports in the quest for the next fifty students. If forty students are lost who contribute more NTR, the strategy may backfire. In too many cases, sixty or more are being lost.

Oh, and in connection with the NTR analyses I introduced (#1 above) it makes sense to work with the athletic programs to target a greater net contribution overall, to be accomplished over a period of years. While athletic participation can be an important part of the college experience, these programs should bot consume all the resources generated.

A word about room and board. Some argue that the contribution from auxiliary enterprises should be factored into these kinds of analyses. My take on room and board is that it is used to support Student Life programs at the college. This includes counseling, residential life, student activities, discipline etc. When you match the net contribution from auxiliaries with overall costs of the student life program, there is rarely much remaining. If anything is left over, investments in capital projects for dorms and dining are not a bad idea. It isn’t good practice to direct those dollars toward the academic programs of the college. That is why we charge tuition and fees.

I wish you well in this environment. Keep trying new things but maintain perspective (and moderation.) We want a balanced, healthy institution. Let’s work together to ensure that.

Related

Jeff,
Two things:
1) the calculation of program cost must, of course, include any capital expenditures needed to add that program, along with maintenance of such; and
2) there are likely to be added costs for, ahem, actually providing an education to these new students. Even if there are empty seats in classrooms, some academic program or other may push capacity because of this initiative. Even when running the numbers on adding an academic program it’s easy to forget that the new students will be taking a lot of courses other than those offered by the new curriculum.
At bottom, we charge tuition for credit hours, not for games. (You know all this, I know.)
Carlton